Rio Tinto to sell its stake in the Simandou project

Rio Tinto and Chinalco have signed a non-binding agreement to sell Rio Tinto’s entire stake in the Simandou project in Guinea to Chinalco.

The Heads of Agreement sets out the proposed principal terms of the sale with the aim of signing a binding agreement within six months.

Rio Tinto will receive payments of $1.1 – 1.3 billion based on the timing of the development of the project. The initial payment for shares will commence at the time of first commercial production, on a per tonne basis.

Simandou provides access to one of the world’s largest untapped high-grade iron ore resources, and is expected to sustain a mine life in excess of 40 years.

The Simandou project is currently the largest planned integrated mining and infrastructure development contemplated in Africa, with an expansive scope representing integrated mine, rail, port and ancillary infrastructure.